Property taxes are charges levied by governments and paid by real estate owners. They are the primary source of revenue for local governments in the U.S. In 2022, $67.8 billion was the property tax revenue in New York state alone.
All immovable assets come under property tax.
NEW JERSEY
New Jersey, nicknamed the “garden state,” has the highest property tax rates in the U.S. The state’s effective property tax rate is 2.23%, and the average annual property tax is $8597.69.
New Jersey doesn’t have an estate tax but has an inheritance tax between 11% and 16%.
TEXAS
Texas is the second-most populated state in the U.S. Its citizens pay an effective property tax rate of 1.68%, and the average annual property tax is $4776.81.
The state doesn’t have an estate or inheritance tax.
ILLINOIS
Illinois, nicknamed “the Prairie State”,” has an effective property tax rate of 2.08% and an average annual property tax of $9006.07.
While Illinois doesn’t have an inheritance tax, but the state does have an estate tax ranging from 0.8% to 16%.
NEW HAMPSHIRE
New Hampshire, also known as the “Granite State” and “Switzerland of America,” has an effective property tax rate of 1.93% and an average annual property tax rate of $8389.53.
The state doesn’t have an estate or inheritance tax.
VERMONT
Vermont, also known as the “Green Mountain State,” has an effective property tax rate of 1.83% and an average annual property tax rate of $9,119.74.
Vermont doesn’t have an inheritance tax but levies an estate tax of 16% with an exemption of up to $5 million.
CONNECTICUT
Connecticut is a global leader in shipbuilding, aerospace manufacturing, investment, and asset management. Such accolades come with high prices, as shown by the state’s high property taxes. Connecticut has an effective property tax rate of 1.79% and an average annual property tax rate of $6,213.98.
While the state doesn’t have any inheritance tax, it does impose an estate tax and a gift tax, where estates worth more than $12.92 million are taxed at 12% in Connecticut.
NEBRASKA
Nebraska, the birthplace of Kool-Aid and the Reuben sandwich, is also known as the “Cornhusker State.”
Nebraska has an effective property tax rate of 1.63%, and the average annual property tax rate is $5,982.37. The state doesn’t have an estate tax but has an inheritance tax where spouses are exempt, but heirs are subject to the tax, with direct heirs paying a 1% tax on inheritances over $100,000.
WISCONSIN
Wisconsin is nicknamed “America’s Dairyland” because it is the nation’s major dairy producer. The state has an effective property tax rate of 1.61%, and the average annual property tax rate is $2,497.18.
The state doesn’t have an estate or inheritance tax.
OHIO
Ohio is considered the “Birthplace of Aviation” because the Wright brothers were from this state. It is also called “the Mother of Presidents” because eight out of forty-four presidents were from this state.
Ohio’s effective property tax rate is 1.59%, and the average annual property tax rate is $3,868.19.
The state doesn’t have an estate tax or an inheritance tax.
IOWA
Iowa, also known as the “Hawkeye State,” has an effective property tax rate of 1.52% and an average annual property tax rate of $3180.79. Iowa’s inheritance tax rates range from 2% to 6%.
The state also has an estate tax exemption if the estate’s value is less than $25000.
PENNSYLVANIA
Pennsylvania is the birthplace of the Declaration of Independence and the U.S. Constitution, thereby earning itself the nickname “The Keystone State.”
The state has an effective property tax rate of 1.49% and a high average annual property tax rate of $7,087.11. Pennsylvania does not have an estate tax but has an inheritance tax ranging from 0% to 15%, where direct heirs pay a tax of 4.5%, siblings pay a tax of 12%, and unrelated heirs pay a tax of 15%.
NEW YORK
The state of New York consists of five boroughs, one of which is the famous New York City. It is the fourth most populous state in the U.S. and is also very expensive to live in. New York has an effective property tax rate of 1.40%, and the average annual property tax rate is $3,407.29.
New York doesn’t have an inheritance tax but an estate and gift tax. Estate taxes range from 3.06% to 16%.
RHODE ISLAND
Rhode Island is the smallest state in the United States and is nicknamed “The Ocean State.”
The state’s effective property tax rate is 1.40%, and the average annual property tax rate is $3,432.79. Rhode Island doesn’t have an inheritance tax but an estate tax. Estate taxes range from 0.8% to 16% and are only levied on estates worth more than $1,733,264.
MICHIGAN
Michigan is also called the “Great Lakes State” because it is the only state in the U.S. that borders four of the five Great Lakes.
Michigan has an effective property tax rate of 1.38%, and the average annual property tax rate is $7,369.50.
The state has neither an estate tax nor an inheritance tax.
KANSAS
Kansas, also known as “the Sunflower State,” has an effective property tax rate of 1.34% and an average annual property tax rate of $2,610.67.
Kansas doesn’t have an estate tax or an inheritance tax.
MAINE
Maine, also known as the “Pine Tree State,” is the largest state in New England, with over four thousand beaches off its coast. Maine’s effective property tax rate is 1.24%, and the average annual property tax rate is $2,586.29.
Maine doesn’t have any inheritance tax, but there is an estate tax ranging between 8% to 12%, with an exemption of up to $6.41 million.
MASSACHUSETTS
Massachusetts, nicknamed “The Bay State,” is the seventh smallest state in the United States. The state has an effective property tax rate of 1.14%, and the average annual property tax rate is $4,534.54.
Massachusetts doesn’t have an inheritance or gift tax, but there is an estate tax of 0.8% to 16% on estates worth more than $2 million.
SOUTH DAKOTA
South Dakota is known for the famous Mount Rushmore National Memorial, after which it’s nicknamed. The state has an effective property tax rate of 1.17%, and the average annual property tax rate is $2,974.75.
South Dakota doesn’t have an estate tax or an inheritance tax.